Kristin Wong, 4/05/17
If you owe the IRS money, be prepared for some changes. The IRS will now use private debt collectors for overdue federal debt, which might confuse some taxpayers. Here’s what you need to know.
The program was authorized by Congress late last year and it basically allows private collection agencies to collect outstanding tax payments on behalf of the IRS. As Consumerist points out, this raises all sorts of questions:
Will taxpayers disregard these calls because they think they’re a scam? How can consumers tell the difference between someone collecting a legitimate tax debt and a con artist? What if the contracted debt collectors resort to bad behavior like threatening arrest or generally harassing people?
For their part, the IRS acknowledged these concerns on a web page explaining the new program. Here are the basics of what you should know.
Not All Debt Will Go to Private Collections
According to the bill, a private debt collector will only take over under a specific set of circumstances.
These agencies will only take over accounts if several criteria are met:
- The IRS removes the debt from their active inventory due to a lack of resources or because they can’t locate the taxpayer.
- Over a third of the “applicable limitation period” has passed and there’s no IRS employee assigned to collect the debt.
- The debt was assigned to collection but more than 365 days have passed without interaction with the taxpayer (or a third-party) for purposes of furthering collection of the receivable.
Also, the IRS listed some specific instances in which it won’t move accounts to private collectors. These instances involving taxpayers who are:
- Deceased
- Under the age of 18
- In designated combat zones
- Victims of tax-related identity theft
- Currently under examination, litigation, criminal investigation or levy
- Subject to pending or active offers in compromise
- Subject to an installment agreement
- Subject to a right of appeal
- Classified as innocent spouse cases
- In presidentially declared disaster areas and requesting relief from collection
If you get a call from a private agency, they have to return your account to the IRS if any of these situations apply.
You’ll Get a Notice From the IRS First
If your debt is indeed sent to collections, the IRS will let you know. You’ll get a written notice that your accounts are being transferred, and you’ll get a second, separate letter confirming the transfer.
Here are the specific collection agencies they’re working with:
- CBE Group
- ConServe
- Performant
- Pioneer
So what about tax scams? Keep in mind, the IRS still won’t just randomly call you out of the blue. They’ll send you notice through the mail first:
Even with private debt collection, you shouldn’t receive unexpected phone calls from the IRS demanding payment. When people owe tax, the IRS always sends several collection notices through the mail before making phone calls.
The said, they still want taxpayers to be vigilant, and they keep a list of specific tax scams here.
You Still Have Some Protections
Also, these private collectors still have to follow the rules in the Fair Debt Collection Practices Act. Some of these rules include:
- They can’t call you before 8 a.m. or after 9 p.m
- They can’t call you at work if you’ve told them not to
- They can’t falsely claim you’ve committed a crime
- They can’t misrepresent the amount you owe
- They can’t threaten you with harm or arrest for lack of payment.
If you run into these problems with the private collector, the IRS urges you to report it to the Treasury Inspector General for Tax Administration (TIGTA). You can call at 800-366-4484, visit
www.tigta.gov, or write to:
Treasury Inspector General for Tax Administration
Hotline
Post Office Box 589
Ben Franklin Station
Washington, DC 20044-0589
If it’s a threat, they suggest you contact the TIGTA Office of Investigations in your area.
Reply With Quote
Originally Posted by Zippyjuan
Connect With Us